Infosys down nearly 2% on fears of sales outlook revision
Mumbai, Jul 2 (PTI) Falling for the second day in a row today, shares of Infosys lost by nearly 2 per cent on worries that the IT major will scale down its FY''14 sales outlook.
The IT bellwether ended the day 1.72 per cent lower at Rs 2,405.55 on the BSE. At the NSE, the stock was down 1.75 per cent to Rs 2,408.20.
Fall in the stock was significant in pulling down the benchmark Sensex by 113.57 points as Infosys alone contributed 24.03 points to the overall fall in the index.
According to a Morgan Stanley report, Infosys is expected to cut 2013-14 revenue guidance to 4-6 per cent as wage hikes and higher costs are hitting its margins, offsetting the benefits of rupee depreciation.
"A QoQ revenue decline for Infosys cannot be ruled out in Q1FY14, with higher costs and wage hikes dragging on margins in 1HFY14 despite the strong inherent operating leverage of its bench," Morgan Stanley has said in a research note.
The report further noted that any cut in revenue guidance and lower QoQ margins could limit FY''14 EPS upgrades despite rupee depreciation.
It said Infosys may cut its FY''14 revenue guidance to 4-6 per cent year-on-year, adding that "we expect first quarter (April-June) revenues to be flattish with wage hikes and productivity hitting Q-o-Q margins and offsetting rupee depreciation".
In the stock market, the BSE benchmark Sensex ended the day 113.57 points lower at 19,463.82.
RBI Chief Raghuram Rajan stated that more economic data is needed to be confident that economic growth is picking up, although he added that the benefits to exports from the Rupee's fall is yet to kick in.
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